Problem Situation: MVM Corporation seeks to partner with another company by letting them use and sell our software platform as a service, white labeled, in exchange for a revenue share.Data Price per customer40,000 Revenue share (to us) 40% Total new customers 3 in first year, then 25 in year 2, then 100 in year 3, then 175 in year 4. Support rep cost per account 2,000 Hosting cost per account 500 New office for whitelabel team (annual) 75,000 Overhead payroll for whitelabel team (annual) 600,000 Capex buildout of whitelabeling platform 750,000 Find: (1) Revenue(2) COGS(3) Gross Profit(4) Gross Profit margin(5) Operating expenses(6) Operating income Assumptions:(1) Taxes 35%(2) Useful life of CAPEX 4 yearsImportant: Analyze the result and recommend to MVM management.

Working Notes :- Particulars Amount Amount Price per customer 40,000 Our share 40% 40,000 x…

Answered: Problem Situation: MVM Corporation…

Problem Situation: MVM Corporation seeks to partner with another company by letting them use and sell our software platform as a service, white labeled, in exchange for a revenue share.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10EB: Keleher Industries manufactures pet doors and sells them directly to the consumer via their web...

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Concept explainers

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.

Question

Problem Situation: MVM Corporation seeks to partner with another company by letting them use and sell our software platform as a service, white labeled, in exchange for a revenue share.

Data

Price per customer	40,000
Revenue share (to us)	40%
Total new customers 3 in first year, then 25 in year 2, then 100 in year 3, then 175 in year 4.

Support rep cost per account	2,000
Hosting cost per account	500

New office for whitelabel team (annual)	75,000
Overhead payroll for whitelabel team (annual)	600,000
Capex buildout of whitelabeling platform	750,000

Find:

(1) Revenue

(2) COGS

(3) Gross Profit

(4) Gross Profit margin

(5) Operating expenses

(6) Operating income

Assumptions:

(1) Taxes 35%

(2) Useful life of CAPEX 4 years

Important: Analyze the result and recommend to MVM management.

Definition Definition Indirect costs incurred while producing goods or services. Overhead costs cannot be directly attributed to products or services. Overhead includes indirect material cost, indirect labor cost, rent, utilities expenses, and depreciation. Since these costs directly affect the profitability of a company, managing overhead becomes an important task for management.

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